When thinking of theft, you might imagine the sneaky Pink Panther slipping in and stealing from you. While not every business sells jewels, every business does earn revenue. But how does one steal from a company in a way that isn’t immediately noticeable? Time theft.

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But why does time theft happen and how does it affect your approach to employee attendance? We’ll discuss that and a lot more.

Table of Contents:

• What Is Time Theft?
• Why Time Theft Happens
• Is Time Theft Illegal?
• How Employees Steal Time
• Recognizing Employee Time Theft
• Preventing Employee Time Theft
• How to Handle Time Theft
• Conclusion

What Is Time Theft?

Time theft is when an employee spends on-the-clock time on non-work-related tasks. According to estimations, employees steal ?as many as 4.5 hours from their employer weekly. The employee may not even realize they’re doing it; everyone has idle time while at work, but the number can be huge when those slow days add up.

Why Time Theft Happens

The U.S. Bureau of Labor Statistics reports that an estimated $2,000 goes missing yearly due to time theft. It’s a hot topic with a lot to cover.

Why is it happening?

Like all forms of theft, there’s always a reason. For most workers’ who are stealing time, the conditions surrounding the theft must be just right. Specifically motivation, rationalization and opportunity.

The fraud triangle, created by criminologist Donald R Cressey to show people what goes on in the mind of people committing theft and fraud, has been reworked to fit time theft. People think it isn’t a big deal if they clock in five minutes late or out five minutes early — after all, it’s just five minutes. However, the issue becomes bigger when it’s continuously happening.

If your employees are engaging in time theft, they’re stealing time because they feel there’s not enough time in their day or simply because they think they’ll go unnoticed.

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Is Time Theft Illegal?

Time theft is fraudulent, but it isn’t easy to prove that it actually happened. The Fair Labor Standards Act requires that employees receive minimum wage and this means you can’t withhold wages over the theft of time.

Once this type of theft occurs, the easiest solution is to reprimand, re-train or terminate the employees involved. It keeps you clear of as many legal issues as possible.

Understanding the why is important, but so is understanding the how, so let’s talk about how time theft happens.

How Employees Steal Time

Understanding employees’ motives is the key to uncovering why time stealing occurs and how to combat the typical methods of stealing time. It’s essential to understand that sometimes time theft is unintentional.

However, not all types of time theft are accidental, so let’s look at those.

Falsifying Time Cards

Every employee management system is different in how it rounds time. Some may round time to the nearest fifteen minutes and others may do three-minute increments. It depends on the software you’re implementing.

The Department of Labor allows adjustments for your employees’ time, as long as they’re reasonable and are not biased towards yourself or the employee in question. The estimate must reflect fair and just rounding to the nearest increment.

This type of time theft is common when people worry they won’t complete eight hours of work. This worry stems from the fact employers avoid overtime pay by rounding down.

That’s why the FLSA dictates that ?employee time from one to seven minutes can be rounded down and will not count as time worked. However, eight to 14 minutes worked must be rounded up and counted as time worked.

Buddy Punching

When someone buddy punches, they clock in for a friend who isn’t physically there. If someone comes to work late or not at all, it can change how serious their theft is.

Unauthorized and Extended Breaks

People sometimes take advantage of a flexible schedule and may take unauthorized or extended breaks. They do this based on the assumption that nobody will notice due to flexible work hours.

Some instances of this are:

• Extended lunch breaks
• Frequent smoke breaks
• Prolonged personal tasks

Social Media Use

Social media is everywhere, and it’s so easy to access that sometimes people don’t remember that they don’t need to be on it constantly. It’s become a societal norm to upload every single thing that happens in your life on various media — Facebook, Instagram and Twitter.

It’s too easy to wind up scrolling on Facebook and forget what you were working on. Social media is a time sink, and you can definitely fall down a rabbit hole of things that don’t pertain to work. At least with email and phone calls, you’re receiving information that’s relevant to your workday.

Personal Activities on Company Time

Personal activities, such as phone calls, text messages and personal emails, happen throughout the day. These personal activities aren’t an issue unless they consume too much time. After all, it’s impossible to avoid personal activities, especially if you have children or family members who need you. However, you should still avoid taking up too much of your company’s time for personal communication.

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Recognizing Employee Time Theft

Time theft can be hard to spot, but there are always ways to tell. Sometimes, theft acts such as buddy punching have physical actions like the wrong person purposefully clocking in for someone who isn’t there.

Another thing you can look at is unauthorized overtime and monitor employees’ break times to see when they’re clocking out and back in.

Teaching your HR team and managers how to tell whether time theft is happening is step one in preventing it.

Preventing Employee Time Theft

Time theft is a widespread issue that’s hard to discipline. Knowing how to prevent it can be the difference between losing and earning money. Especially knowing how to prevent it in ways that won’t cause you to look bad or get sued.

Common ways to prevent employee time theft are:

• Automate time tracking
• Develop a detailed policy.
• Improve workplace culture.

The FLSA dictates ?employers must pay their employees for hours worked. However, communicating work hour policies and penalties for stealing time helps control time theft.

Below are some examples of ways to take those suggestions and run with them to improve your workplace productivity.

Use Time Tracking Software

If you’re using Excel sheets or paper timesheets, there’s nothing to stop somebody from tracking their time wrong. The good news is that there are technological solutions to prevent theft.

Time tracking software is an essential tool in preventing time theft. It’s much harder for employees to commit time theft with software because these tools have safeguards to help prevent theft.

QuickBooks Time

This product has timesheet tracking, heightened mobile capability with a universal internet connection, and location information. QuickBooks Time has built-in time theft prevention, such as alerts for mismatched time stamps, clock-in failures and overtime.

TimeClock Plus

TimeClock Plus is a time and attendance solution that has flexible configurations around scheduling. It also makes it more convenient for employees to request changes to their schedules, PTO and sick leave while on the go.

When I Work

This product streamlines scheduling but ?uses employee data to consider their preferred days off and scheduled time off. Mobile check-in with customizable features lets you control how often and when employees can check in or out.

Create Clear Attendance Policies

Having a clear attendance policy that details information about time theft is the first step to stopping the theft of your company’s valuable time and money. If there’s no policy, workers won’t know what’s okay and what isn’t.

Time theft policies should include:

• Information about how time theft hurts businesses and employees.
• The consequences for committing time theft.
• The attendance and time tracking methods that your company will be implementing.

Being transparent and upfront with your employees will help them adapt to changes in policy. There’s no time like the present to get a policy on the books for your company.

Monitor Employees

Monitoring employees may seem draconian, but if you’re transparent with your employees, that can make it easier for them to adapt to being monitored. It may take some time depending on the type of monitoring you’re implementing. Time tracking, attendance and even assigned projects are common methods.

When monitoring employees, look for signs of disengagement, such as a delay in responding to emails or calls, sending assignments in late, notably being unavailable for meetings and repeated mistakes.

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How To Handle Time Theft

When an employee steals time from your company, it’s natural to be upset at first. However, you can take steps to lessen time theft and make the workplace a more productive area for your employees.

Consider the upcoming steps before attempting to deal with time theft accusations. Following these steps will give your workers a more productive environment and a sturdier workplace community:

• Investigate the accusations being put forth, but remember that investigations regarding time theft need to be legally clean, and therefore need to follow guidelines. These guidelines include involving neutral third parties, committing to confidentiality and ensuring you thoroughly document the process.
• Discipline the workers involved, though you should only commit to disciplining your employees if you’ve proven beyond a doubt that the time theft was intentional. Disciplinary actions can include, but aren’t limited to, suspension or termination.
• Develop a company-wide policy that encourages clear communication and be clear on the consequences of late or early clock-ins if those aren’t allowed. This policy should be in your employee handbook so employees have access to it.

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Conclusion

Now that you know what time theft is and how to combat it, you’re ready to increase your organization’s productivity. Whether you’re updating an existing policy manual or implementing a new time tracking method, you’re fully prepared.

If you’re looking for a time tracking solution, our free comparison report makes it easy to compare top products in the market.

How do you think companies should approach time theft? What’s worked for you? Let us know in the comments.